Energy& s risky $1 billion bet on two politicallyconnected …

22 Фев 2014 | Author: | Комментарии к записи Energy& s risky $1 billion bet on two politicallyconnected … отключены
Interesting » Electric Cars

Energy Department ‘bet’ on Automotive ends in bankruptcy

in a shuttered General Motors in Wilmington, Del. Vice Joe Biden heralded a half-billion-dollar of Energy loan that transform the idled site a production line for electric

“Folks, we’re making a Biden said on Oct. 27, “We’re making a bet in the future, making a bet in the American people, making a bet in the market, we’re a bet in innovation.”

That loan is of a $1 billion bet the Energy Department has on two politically connected California carmakers producing sporty — and — cutting-edge autos. One is Fisker the project heralded by Biden and by a powerhouse venture capital whose partners include Vice President Al Gore and a donor to President Obama. The is Tesla Motors. whose backers include a major for Obama and Google co-founders Page and Sergey Brin.

An by iWatch News and ABC News that the DOE’s bet carries for taxpayers, triggering concern industry observers and government

Fisker is more than a behind rolling out its $97,000 vehicle bankrolled in part DOE money. While more are soon, just two of its cars been delivered, including one to star Leonardo DiCaprio. And own SEC filings say it has lost money quarter and states: “We have a of losses and we expect significant in our costs and expenses to result in losses for at least the foreseeable . While Tesla’s major DOE is intended to help it mass a new $57,400 Model S sedan, the has no experience in a project so vast.

is intense scrutiny of the decisions by the Department of Energy as it invests of taxpayer dollars in alternative The questions follow the administration’s $535 million investment in panel maker Solyndra. The collapse, bankruptcy and raid by FBI generated a litany of questions how the Energy Department doles out in highly sought after energy seed money.

A key experts and investigators say, is another Solyndra is in the offing.

In executives with Tesla and said comparisons to Solyndra are Each said the government’s will ultimately pay off by supporting a of electric cars that ease the nation’s dependence on and benefit the environment.

“It’s a worthwhile risk,” said O’Connell, vice president of and business development for Tesla “I absolutely believe it was a good bet for taxpayers.” Tesla has said its production of the sedan will lead to profitability.

Henrik Fisker, the renowned designer who founded the car company carries his name, said his holds tremendous promise and has $600 million in private

When asked directly by ABC if taxpayers should worry the more than $500 in federal funds on the line, he was

“No, I don’t think need to worry about Fisker said.


When if Fisker might be the next he said, “Absolutely not.”

On the company disclosed that of the sedan has been pushed to

By some key measures, Tesla is of Fisker. More than of its first electric cars are on the while Fisker is just to get its first cars into Tesla is further along in a second, lower cost While both firms of big dollar private investments, vulnerabilities are more publicly through its SEC filings, in contrast to the held Fisker.

Fisker is going public.

Energy officials said such by their nature, are risky the department is financing innovative, game-changing technologies that deliver long-term benefits. said neither firm has a loan payment, or sought from the department to restructure lending agreements.

Energy told iWatch News and ABC they are closely monitoring the of the companies, and despite some about delays, they optimistic that the two companies can

From well established like Ford to innovative like Tesla and Fisker, auto industry is being LaVera Damien of Energy in a statement. While supporting technologies always carries a of risk, these investments long-term benefits.

Yet an audit year by the Government Accountability the investigative arm of Congress, criticized the Department for not keeping close tabs on its fleet of auto — including those to Fisker and — to ensure they meet The funding was issued under the $25 Advanced Technology Vehicles loan program, one piece of a umbrella of DOE loans and loan going out the door.

“DOE be assured that the projects are on to deliver the vehicles as agreed,” the GAO report examining the department’s program. “It also means U.S. taxpayers do not know they are getting what paid for through the loans.”

and Fisker stand in rare in securing the ATVM loans. To records show, more 95 percent of applicants are still approval or have been

Between them, Fisker, at million, and Tesla, at $465 have secured nearly $1 to jump-start production of their Combined, the companies have drawn down more $300 million—Fisker at $192 and Tesla $110 million, Financing Bank records

Such funding delivers to upstart companies like and Fisker, helping them even more private And they benefit from a government interest loan for each company has fluctuated 1 percent to 3 percent.

Industry question whether the Department of had the auto industry know-how to an informed decision, and they that another government-backed could damage the very the program intended to help.

“I we’ll absolutely end up having our of Solyndra in the transport world on the way the DOE has, and seems to still be its loan program without veteran diligence in the process,” Chelsea Sexton, an industry and advocate for alternative fuel

The majority of the DOE funding for Fisker is for the company to develop a less mass market sedan, the The car is to be produced at the shuttered GM plant in The Energy Department approved the for an auto that, even two later, has not been publicly

Fisker said the Nina has designed and built, but it remains wraps to maintain a competitive

While Tesla is ahead of — its $109,000 Roadster is already on the — Sexton also has questions its prospects even though her works for the company. Tesla to use the bulk of the DOE loan to develop the expensive Model S, a car that hit full production until year.

“None of us with any in the industry think there’s any of guarantee they’ll make she said. “It looks pretty right now, they’re out their plant, things to be on track, so we’re all encouraged. But you we watched GM and Chrysler go bankrupt.”

DOE loan backed two projects for the

Fisker’s loan commitment, of million, was announced in September The loan was broken in two parts.

In the Fisker would use $169.3 for engineering integration costs to its first vehicle, the flashy Karma. Engineering work take place in Pontiac, with support from the headquarters in Irvine, Calif.— and assembly completed overseas.

The Karma, with a base of $96,895, was supposed to be in showrooms year, said the Department of press release announcing the loan commitment. “The Karma is scheduled to appear in in summer 2010,” the DOE said. The said a shipment of 40 cars arrived in the U.S.

The bigger chunk of the loan, for million, would bankroll Project Nina, a lower plug-in hybrid sedan. estimates that up to 75,000-100,000 of highly efficient vehicles roll off assembly lines in the every year beginning in 2012,” the Energy Department That has now been pushed to

A month later, in October Biden traveled to his home Delaware, to herald Fisker’s to convert the closed GM factory to the Nina.

“Thanks to a real by this administration, loans the Department of Energy, the creativity of companies and the tenacity of great partners like Delaware — on our way to helping America’s auto reclaim its top position in the global Biden said.

The plant followed a heavy lobbying by Delaware politicians from parties. In September 2009, Rep. Mike Castle to Energy Secretary Steven saying the Fisker proposal had merit,” and urging Chu to give the “careful consideration” for the loan.

At the the governor and state politicians turns, along with to proclaim the project to cheering collar workers. They it would produce thousands of

While Fisker has hired design and engineering teams in the the auto plant jobs in right now number about Meanwhile, Finland has gotten 500 to build the Fisker car. said he remains convinced the jobs will come.

The of Energy loan to Fisker in April 2010, and again took center stage in a announcing the loan. “The of Fisker is a story of ingenuity of an company, a commitment to innovation by the government and the perseverance of the American industry,” said the vice

ABC News sent questions to the House Monday and requested an with the vice president. was not made available but his office a statement: “The Office of the President did not encourage the Department of to choose any particular company any other but, like in the administration, supported the department’s program and the creation of car manufacturing in the United States.”

Executives Tesla and Fisker said won government support because projects had the best shot at They said the involvement of figures in their companies not suggest they attempted to use influence to secure the loans.

Beyond Biden, more connections

Both companies political heavyweights behind One of Fisker’s biggest financial records show, is the California capital firm Kleiner Caufield Byers. The firm supports numerous green-tech records show.

Kleiner partner John Doerr, a billionaire who made a fortune in Google, hosted Obama at a dinner for high tech at his secluded estate south of San Doerr and Kleiner Perkins have contributed more $1 million to federal political and campaigns over the last two primarily supporting Democrats. serves on Obama’s Council on and Competitiveness.

Doerr has not replied to requests since March.

Vice President Al Gore is Kleiner Perkins senior Gore could not be reached for

“There certainly have suspicions around Fisker their major venture is Kleiner Perkins, who has Al Gore as a and is certainly politically connected in said industry observer “Whether that played a or not is up to the DOE to explain.”

For months, as iWatch and ABC News have explored how connected companies secured DOE Energy Department officials been steadfast: Politics entered the picture. Each project was screened by professionals and on the merits.

Tesla brings pull, as well. Steve who has “bundled” hundreds of thousands of for Obama, sat on Tesla’s board March 2007 to December a time period in which DOE its loan commitment to the Silicon company. His Westly Group was a financial supporter of Tesla until Tesla went in 2010, and Westly himself to invest in the company.

He now serves on an board to the Energy Secretary.

Interesting » Electric Cars

has declined interview requests February.

Tesla’s founder and Elon Musk, is a hearty contributor who has primarily backed including Obama. According to reports, another Tesla is Nick Pritzker, a donor to and a cousin of Penny Pritzker, the finance chair of Obama’s campaign.

O’Connell, the Tesla said political muscle no role in the company’s award of the million in loans, noting the initial application was filed Bush — though landed Obama.

The president has backed car makers as part of his long-shot of 1 million electric vehicles on the by 2015. In his budget earlier year, Obama pitched consumers a $7,500 rebate they buy an electric car. and Fisker would be among car makers to reap a windfall that rebate, helping sell cars on the back end securing nearly $1 billion in support to build them on the end.

Tesla’s bet on a sedan

In Tesla’s as in Fisker’s, the government loan was into two parts.

The first for $365 million, is to finance a facility for the Tesla Model S Tesla’s lower-cost answer to its $109,000 Roadster.

The other million funded a facility to battery packs and electric trains used by Teslas and automakers, including the Smart city car by Daimler. Tesla to such partnerships — along investments from Toyota and — as signs that long companies believe in its cars.

“We a demonstrated track record on the side,” O’Connell said, should give great to the American taxpayer, as they about a loan that’s us to accelerate our business model.”

Fisker, Tesla is a public Its SEC filings offer a more assessment of the obstacles it faces on the to profitability.

Tesla has yet to turn a and suffered net losses in each “Since inception and through the and six months ended June 30, we had accumulated net losses of $522.8 its most recent 10-K shows.

It has no experience in high manufacturing of electric cars, its say — the very project it sees as the toward profitability. Tesla it encountered “significant delays” in the Roadster — and acknowledges that the Model S will be a more undertaking. The newer car is the project by DOE.

“We have no experience to in high volume manufacturing of our vehicles,” Tesla’s SEC filings “Our future business in large part on our ability to on our plans to develop, manufacture, and sell our planned Model S vehicle.”

The Roadster was produced in quantities with the body by Lotus in the United Kingdom and assembly by the company at its facility in Park, Calif. The Model S, by will have much volume and be manufactured in Fremont, The company said production begin next year.

“As a Tesla wrote, “the portion of the production model for the S will be substantially different and more complex than the portion of the production model for the Roadster.”

The company added, “We may similar delays in launching the S, and any such delays could be

Industry observers say Tesla’s plan to launch the Model S is with challenges.

“They to scale up production from cars a year to 20,000 a year, that’s going to be a hard trick for them to do. want to make most of own parts; Detroit can’t do because it’s too inefficient. And wants to own its own dealerships.

Henry tried that back in the and gave it up because it was too difficult,” Alex Taylor, a veteran industry analyst and writer.

another industry watcher, questions remain even as forges partnerships with companies.

“Tesla is burning a lot of right now, no question. just about sold out on first car and the second car doesn’t for close to a year. So they can burn cash for that nine months to a year or said Sexton.

O’Connell the SEC filings present worst scenarios. He said the company, and its investors, believe the risk reap rewards.

“It is a risky in the best heritage of some of the great companies that grown up in the Silicon Valley,” he “This is a place where propose ideas, finance ideas, achieve milestones, a greater finance, and succeed the way.”

Still, questions over how well the Energy is watching companies in its ATVM The GAO’s February report the department lacked the engineering needed to fully monitor of loan recipients.

This the GAO concluded, “may not be sufficient to that the vehicles are delivered as because their expertise is financial and not technical.”

The GAO suggested the Department take two steps: to efforts to retain more experts to track progress, and more quantifiable performance for its ATVM program goals.

Silver, then executive of DOE’s Loan Programs disagreed with both GAO saying the department was carefully progress, had employed engineering when required and was on track. is very proud of the fact the program was set up in record time,” wrote. He has since resigned .

Interesting » Electric Cars
Interesting » Electric Cars

articles

Other articles of the category "Interesting":

Twitter-news
Our partners
Follow us
Contact us
Our contacts

dima911@gmail.com

423360519

About this site

For all questions about advertising, please contact listed on the site.


Catalog ALL Electric Cars and hybrid/ News and Information about Electric Car and Electric Vehicle Technologies, batteries for vehicle catalog with specifications, pictures, ratings, reviews and discusssions about Electric and Hybrid cars - Green energy